1. Field of the Invention
The present invention relates generally to a system and method for managing a negotiation. More specifically, a system and method for structured bilateral and multilateral negotiations are disclosed.
2. Description of Related Art
The explosive field of online electronic commerce has resulted in a number of online commerce mechanisms. Some of the online electronic commerce mechanisms simply mirror off-line commerce mechanisms while others are unique to the new electronic commerce medium. Generally, a key component of a commerce mechanism is the determination of whether a trade is to take place and, if the trade is to take place, the determination of the terms of the trade, e.g., the goods, services, and/or payments involved.
One example of a commerce mechanism is a take-it-or-leave-it, fixed-terms mechanism. An off-line merchant, such as a local supermarket, is an example of such a mechanism. In particular, the supermarket displays a price and the shopper has the option of purchasing the product at the displayed price or not purchase the product at all. Similarly, an online merchant may display a list of offered products and/or services and the associated prices and/or other attributes, such as delivery method and time. An online electronic shopper may accept the terms by purchasing some of the offered products and/or services via the Internet browser interface or not purchase any of the listed products or services at all.
Another example of a commerce mechanism is an auction. In an auction, the terms of the deal are typically determined through a competitive process in which multiple parties may participate. Generally, the terms of the deal include a price and quantity of the product. A single-sided auction, both online and off-line, is an example of an auction. In a single-sided auction, either a single seller offers one or more products and/or services for sale to one or more competing buyers, or a single buyer offers to purchase one or more products and/or services from one or more competing sellers. Off-line auction commerce mechanism is well known while online auction commerce mechanism is currently an exploding field.
Yet another example of a commerce mechanism is a bilateral negotiation. In a bilateral negotiation, a buyer and a seller trade offers and counter-offers back and forth until either a deal is struck or the bilateral negotiation is somehow terminated. A residential real estate buyer and a residential real estate seller trading offers and counter-offers back and forth is an example of a bilateral negotiation. Examples of bilateral negotiation mechanisms also exist in the online electronic medium. Typical online electronic bilateral negotiation mechanisms generally comprise a structured way of making an initial offer followed by an unstructured bilateral negotiation process between the two parties. In these online bilateral negotiation mechanisms, the electronic medium merely serves as a communication tool, similar to a telephone, facsimile machine, or electronic mail, as well as a vehicle for posting the outcome of the negotiation, if desired.
The negotiation system of Altra Energy Technologies, Inc. (www.altranet.com) provides an example of an online bilateral negotiation for the energy industry. In Altra's online bilateral negotiation system, the negotiating parties can trade in an anonymous automated exchange. In addition, the negotiating parties have the option of selecting a listed offer and entering an informal negotiation process “under the radar screen.” During the negotiation process, the offer is marked as being under negotiation and, upon successful conclusion of the negotiation process, the terms of the negotiated deal are posted.
The negotiation system of CheMatch system (www.chematch.com) provides example of an online bilateral negotiation for the petrochemical industry. Similar to the Altra negotiation system, the negotiating parties post structured offers in the CheMatch system. In particular, the posted offers specify the various attributes of the product for sale, such as price, quantity, purity level, location, delivery time, etc. The negotiation process involves the sending back and forth of English text messages. The fact that an offer is under negotiation is generally signaled to all the market participants. However, unlike the Altra negotiation system, the final terms of the deal between two parties, if a deal is struck, are not released to the other market participants.
The online bilateral negotiation has the advantage being open-ended to allow the negotiating parties to express any comments or offers in natural language, closely resembling the process in the off-line bilateral negotiation process. However, there are many disadvantages to the conventional online bilateral negotiation process. For example, in the conventional online bilateral negotiation process, the negotiating parties are not given assistance in reaching a successful conclusion. In addition, there are no guarantees on the length of the negotiation and there is no coherent notion of the what the current state of the negotiation is that the negotiating party could take in at a glance. Another disadvantage to the conventional online bilateral negotiation process is that there is generally no meaningful way to recover the state of negotiation if the system crashes, i.e. the conventional online bilateral negotiation process does not provide for recoverability. Further, there generally is no coherent notion of what commitments to which any negotiating party can be held prior to the conclusion of the negotiation.
Some negotiation systems overcome some of these disadvantages. See, for example, www.interneg.org. As an example, each offer is typically precisely defined as values for certain attributes, such as price and warranty type. The state of the negotiation at any given point in time is thus generally clear to the negotiators. In such negotiation systems, an informal, natural-language note can augment the structured offer and it is up to the negotiation parties to decide to what extent to rely on the formal versus the informal components of the available information.
Nonetheless, the emphasis in the conventional negotiation systems is the bilateral negotiation. Any multilateral considerations are typically merely secondary. For example, the conventional negotiation system may simply collect backup offers until the current negotiation terminates and thus does not render the negotiation system a true multilateral negotiation system. Thus, what is needed is an electronic negotiation system that manages bilateral and multilateral negotiations within the context of an overall multilateral negotiation environment.